How Sam Altman return as OpenAI chief affects Microsoft? Experts explain - Hindustan Times
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How Sam Altman return as OpenAI chief affects Microsoft? Experts explain

Nov 22, 2023 04:38 PM IST

OpenAI on Tuesday announced that an agreement had been reached for Sam Altman to resume the position of CEO, just days after his removal.

The recent crisis at OpenAI, the creator of ChatGPT, appears to be reaching resolution in a full circle. The co-founder and CEO, Sam Altman, faced termination from the board, leading to two interim CEOs within a week before Altman’s reinstatement.

Sam Altman, left, appears onstage with Microsoft CEO Satya Nadella at OpenAI's first developer conference, on Nov. 6, 2023, in San Francisco.(AP)
Sam Altman, left, appears onstage with Microsoft CEO Satya Nadella at OpenAI's first developer conference, on Nov. 6, 2023, in San Francisco.(AP)

Microsoft, OpenAI’s major investor holding a 49% stake, expressed dissatisfaction with Altman’s ouster. With the backing of Microsoft CEO Satya Nadella, Altman received an offer to join Microsoft. Now that Altman is back at OpenAI, questions arise about the shifting power dynamics and the impact on Microsoft’s AI goals.

Analysts and investors weigh in on the situation:

Microsoft misses chance to strengthen its own AI unit?

Victoria Scholar, head of investment at Interactive Investor:

"While he'll (Microsoft CEO Nadella) no doubt be pleased about the fact that order has been restored at OpenAI, in which Microsoft is a major investor, there might be an element of disappointment that he hasn't snapped up the Silicon Valley superstar Altman after all.”

Also read: Satya Nadella's reaction as Sam Altman returns to OpenAI

Future of OpenAI and Microsoft partnership?

Kelvin Wong, an analyst at OANDA:

"This latest boardroom tussle has shown that Altman has the full backing of Microsoft as a person and as long as he remains in charge of OpenAI, and there should not be any negative spillover effects between the partnership of OpenAI and Microsoft.

“Altman and Brockman are also more suited to collaborate in start-up culture given the infancy of AI at this juncture without any red-tape hindrances from an MNC such as Microsoft.”

Ipek Ozkardeksaya, an analyst at Swissquote Bank:

"His ousting upset to a point that company's existence was put to question. Now, the outcome could be frustrating for Microsoft.

“Even though Microsoft benefits generously from ChatGPT's uprise, OpenAI remains a satellite unit, and integrating Altman in an internal MSFT team would've made sense.”

Will Microsoft consider for a board seat in OpenAI?

Mak Yuen Teen, director of Center for Investor Protection at National University of Singapore Business School:

"There may be good reasons why Microsoft does not have a board seat. It may even be to protect Microsoft from anti-trust actions or conflicts as Microsoft itself has its own AI unit.

"It (Altman's return) may put an end to the turmoil on the surface for now but there may continue to be deep governance issues that remain.

"Sam Altman seems awfully powerful and it is unclear that any board would be able to oversee him. The danger is the board becomes a rubber stamp. Altman and (Microsoft CEO) Nadella may have pushed to allow Altman a much freer hand."

Daniela Hathorn, an analyst at Capital.com:

“Microsoft... had openly supported Altman's return over the weekend. Still, the tech giant now wants a seat on the new board that will need to be formed over the coming months, as it wants to avoid any further surprises.”

(Inputs from Reuters)

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